UPDATE 2-FTSE 100 hits lowest since May on no-deal Brexit fears, Wall St slide

(For a live blog on European stocks, type LIVE/ in an Eikon
news window.)
* Homebuilders fall as regulator suspects malpractice
* Utilities, healthcare, consumer goods stocks lead declines
* Tech selloff hits Wall Street for second straight day
* FTSE 100 down 0.9%, FTSE 250 off 0.6%

(Updates prices to close, adds comments)
By Shashank Nayar
Sept 4 (Reuters) - The FTSE 100 fell to a near four-month
low on Friday as the chance of Britain leaving the European
Union without a trade deal rose sharply, while housebuilders
tumbled amid scrutiny from the UK's competition regulator.
The blue-chip FTSE 100 .FTSE fell 0.9% on the day to post
its third straight weekly decline, with healthcare, consumer
goods and industrial stocks among the biggest drags in the
index. The mid-cap FTSE 250 .FTMC closed down 0.6%.
Brexit negotiations have been threatened by London's
insistence that it has full autonomy over its state aid plans,
negotiators and diplomats said, and fears are mounting that an
exit without a trade deal could sow yet more economic chaos amid
the COVID-19 crisis. "There remains a fragile backdrop with mixed economic data,
concerns about rising unemployment and no sign yet of a
coronavirus vaccine, meaning that the slightest bit of bad news
could be enough to cause further volatility in markets," said
Russ Mould, investment director at AJ Bell.
UK stock markets have rallied since a coronavirus-driven
crash in March, but had so far lagged their U.S. peers, which
were scaling record highs on the back of historic stimulus and a
jump in heavyweight tech stocks.
But U.S. benchmarks have fallen sharply since Thursday, with
the tech-heavy Nasdaq .IXIC shedding as much as 5% for a
second straight day, sparking a flight from global equities.
.N
"The selloff was both overdue, after the market has been
unidirectional higher for months, and likely a blueprint of the
kind of volatility we will see as we work our way into the
fall," said Art Hogan, chief market strategist at National
Securities.
In the UK, data showed the momentum behind a rebound in the
construction industry faded unexpectedly in August, while new
car registrations fell by 6% in annual terms - a "disappointing"
turnaround after July's increase. Housebuilders Barratt Developments BDEV.L , Persimmon Plc
PSN.L , Taylor Wimpey TW.L and Countryside Properties
CSPC.L fell between 4.5% and 7% after the Competition and
Markets Authority said it was investigating whether they might
have broken a consumer protection law in relation to leasehold
homes.
Those losses pulled the wider housebuilding index
.FTNMX3720 down 2.9% to its lowest in more than two months.